Annual Review 2023: Advertising’s Contribution to the UK Economy

Dame Annette King Chair, Advertising Association and Global Lead,
Accenture Song Communications

The advertising industry is often seen as a barometer for the overall health of the economy, and our AA/WARC adspend figures took on greater significance in 2023. Amidst the ongoing cost-of-living crisis, we stepped up our engagement with Government and our members to underscore advertising’s role in sustaining the economy. Our think tank, Credos, continued to delve into fundamental industry questions – exploring not only how we foster competition and innovation but also how we navigate an ever-evolving landscape in response to challenges, such as the climate crisis and AI.

Our quarterly AA/WARC expenditure reports remain an indispensable resource for understanding the health of advertising amidst economic headwinds. While media prices are affected by inflation, adspend is projected to grow by 2.6% to £35.6bn in 2023, with a more optimistic outlook for 2024, expecting a 3.9% growth.

In tough economic times, marketing budgets often bear the initial brunt, and our ongoing campaign to showcase the returns for businesses investing in advertising during downturns was substantiated through various initiatives throughout the year. We were pleased to champion the value of advertising both in Parliament – through the activities of the Debating Group – and in the media with our successful Christmas advertising campaign.

Understanding Advertising and its Value

Credos was born more than a decade ago out of the industry’s collective desire for rigorous research and insight into some of the industry’s most pressing questions, taking on topics such as public trust in advertising, and the economic impact of advertising. Our research since inception has focused on serving the industry wherever possible, while providing analysis of the critical debates.

Some of these debates are captured within Credos’ Advertising’s Big Questions series – editorial pieces commissioned by Credos and written by some of the advertising industry’s leading thinkers. The very first of this series was written by the incomparable Jeremy Bullmore who sadly passed away at the start of 2023. His article, titled “What is advertising” became the yardstick by which all future articles would be measured – an unfair assignment for the many accomplished writers who followed in his footsteps.

Since that article, the series has expanded, now featuring pieces such as advertising’s effect on market growth and consumer price. Understanding and articulating advertising’s real-world impact is something that we must improve as an industry, so as we approach a critical election year, Credos will continue to look at the big questions that our industry is facing and find the right people in our industry to answer them. Reports to look out for in 2024 include a fresh look at the value of trust to our industry, as well as a review of best practice in hybrid working.

Learn more about Credos here.

Debating Issues in Parliament

In 2023, our CEO, Stephen Woodford, continued his role as the chair of the
Debating Group – an organisation of trade bodies committed to debating critical issues affecting the advertising and marketing industry. A series of debates was held in the House of Commons, covering a broad spectrum of key topics, from the opportunities and potential threats of Artificial Intelligence to the value of promotional merchandise.

We were particularly pleased to sponsor a debate alongside the International Advertising Association on whether a strong advertising industry is crucial to restoring the UK economy to good health. Our Front Foot members, Tammy Einav from adam&eveDDB and Dom Carter at The Sun, presented their best case for the value of advertising under the watchful chairmanship
of Damian Collins OBE MP. The debate showcased our top research, from Credos’ invaluable Advertising Pays Reports to our latest AA/WARC advertising spend data, in a House of Commons Committee Room.

Throughout the year, other Debating Group events aimed to demonstrate advertising’s contribution to a robust economy. These included a parliamentary reception hosted by Tulip Siddiq MP and an annual cross-party dinner with Daniel Zeichner MP, Sir Bill Cash MP, and Lord Duncan of Springbank.

As we approach the next general election, we look forward to continuing to use the Debating Group forum to address the issues that most significantly impact our industry through meaningful debate.

Keep up with the latest debates by following the dedicating group on LinkedIn.

Celebrating Christmas Advertising

Our AA/WARC advertising spend figures predicted that £9.5bn was forecast to be spent in the ‘golden quarter’, marking a 4.8% rise from 2022’s record £9bn spend. In a landscape where four out of every five pounds are now spent on online advertising, we spoke about the importance of advertising to businesses, large and small, in reaching customers up and down the country. TV advertising remains important too, with AA/WARC predictions showing £1.5bn spend for the quarter, as brands unveiled blockbuster Christmas ads that often go on to win awards.

We commissioned new research which showed:
• The majority (59%) of people find that Christmas ads set the mood for the festive season, with nearly 70% of young adults finding Christmas ads to be the ultimate festive mood booster.
• Nearly half (48%) of all adults credit Christmas ads with helping to spark gift ideas.

We hit the headlines:
• Our Commercial Director, Sharon Lloyd Barnes, and Communications Director, Matt Bourn, featured on 25 different TV and radio stations, including BBC Breakfast, Times Radio, BBC Radio 5 Live, GB News and 17 regional BBC radio stations.
• National titles including PA Media, The Guardian, BBC Online, and Evening Standard featured our story, provoking further commentary from the likes of The Times and The Independent as the festive advertising season continued.

You can download a full copy of our 2023 Annual Review here.